As the possibility of a Kamala Harris presidency grows, high-income earners across the country are increasingly concerned about the potential impact of tax policy changes on their finances.
While wealthy people across the country could feel the impact, experts suspect residents of certain states will be most affected by the changes.
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Cliff Ambrose, founder and wealth manager at Apex Wealth, said states already struggling with high taxes, such as California and New York, could take the biggest financial hit.
Anthony DeLuca, a financial planner at Annuity.org, warns that high-tax states and low-tax states could see shifts, especially if federal tax increases are enacted.
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“If Kamala Harris wins, states like California and New York will likely take a hit to upper-class wages,” Ambrose told GOBankingRates. “Both states already have high state income taxes, and Harris’ proposed tax increases on high earners could further reduce the take-home pay of the wealthy.”
DeLuca agrees, emphasizing that any state with a state income tax will place a greater burden on the upper class.
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He pointed specifically to New York, where people could face “a 43.9% federal-state tax on capital gains” if Harris wins. DeLuca also noted that New York and California are home to the most S&P 500 headquarters, suggesting that concentrations of large companies in high-tax states could have broader economic implications.
States without income taxes may not be able to avoid the consequences of potential changes.
“In states like Florida, where there is no state income tax, the impact may come more from federal tax increases than from changes at the state level,” Ambrose said.
That suggests that even upper-class residents in tax-friendly states could see changes in their paychecks as a result of potential shifts in federal tax policy.
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DeLuca also cited New Jersey and Massachusetts as states where higher incomes could be significantly impacted. He noted that these states, along with New York and California, “will rise above the 40% mark” in combined federal and state tax rates for high-income earners.
While much of the focus is on income and capital gains taxes, DeLuca highlighted another critical factor: energy policy. States that rely heavily on fossil fuel industries could experience economic shifts under a Harris administration.
“Wyoming produces 41 percent of U.S. coal,” he said. “Any employer or family business that is rooted in this industry would be at great risk of [Harris’s] ideas about economics and energy management.”
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DeLuca also noted that New Mexico, which accounted for 13% of U.S. crude oil production in 2022, could face challenges as funding shifts to alternative energy sources.
To understand the potential changes under a Harris administration, you have to recognize that they are part of a broader policy agenda. Harris’ proposed tax increases on high-income earners are intended to fund programs like health care and infrastructure, which could have an impact on the broader economy.
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DeLuca pointed out that many of the states poised for the most substantial impacts on upper-class wages are also major players in the nation’s gross domestic product, underscoring the complex relationship between tax policy, economic growth and income distribution.
It is important to remember that campaign proposals are just proposals. They do not always become law as intended, because all legislative changes must navigate the complexities of Congress.
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This article Wealthy residents in these states could feel the tax hit if Harris wins – Is yours on the list? originally appeared on Benzinga.com
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